Rottmann v Brittain

The Court of Appeal refused permission to appeal against HHJ Kaye QC's order suspending a public examination under rule 6.175 of the Insolvency Rules 1986 and directing a private examination before a High Court judge under section 366 of the Insolvency Act 1986. The court held that the judge had lawfully exercised the balancing exercise required by rule 6.175(6), weighing the bankrupt's Article 6 ECHR interest in not self-incriminating against the trustee's and creditors' interests in obtaining information. The court concluded that a private examination with strict control over transcripts and use of material provided adequate protection and that the judge had not erred in principle or exceeded the generous ambit of his discretion.

Background and facts:

• Mr Michael Rottmann, a German national, was adjudged bankrupt in September 2005. Civil liabilities arising from alleged fraud in Germany gave rise to a large judgment and to criminal proceedings in Germany. The trustee in bankruptcy had been unable to recover assets and sought a public examination under the Insolvency Rules.
• Mr Rottmann, fearing that answers given at a public examination could be used in German criminal proceedings and thereby infringe his Article 6 fair trial rights and privilege against self-incrimination, applied to adjourn the public examination.

Procedural posture: HHJ Kaye QC ordered suspension of the public examination and directed a private examination before a High Court judge; permission to appeal that order was refused by Lloyd LJ, renewed before Mummery LJ and adjourned to the full court. The present judgment disposes of the application for permission to appeal.

Nature of the application: An application for permission to appeal the High Court judge's order which suspended a public examination and directed a private examination.

Issues framed:

• Whether continuation of the public hearing would be calculated to prejudice a fair trial of criminal proceedings against the bankrupt within the meaning of rule 6.175(6) of the Insolvency Rules 1986;
• Whether the common law privilege against self-incrimination or Article 6 rights protect a witness from compulsion to answer questions likely to incriminate him in foreign criminal proceedings;
• Whether a private examination under section 366 and control of transcripts provides adequate protection to the bankrupt's Article 6 rights.

Reasoning and conclusions: The court analysed authority on the privilege against self-incrimination including Re Atherton, Brannigan v Davison and the European Court's decision in Saunders v United Kingdom. It accepted that a bankrupt is compelled by rule 6.175(1) to answer questions, but reiterated that the common law privilege does not extend to foreign criminal offences in the absolute sense. The critical enquiry is whether use made of compelled testimony in subsequent criminal proceedings would offend the fairness guaranteed by Article 6. The court concluded that the High Court judge had properly balanced the competing interests, and that ordering a private examination under section 366 with strict controls on transcripts was an appropriate and lawful exercise of discretion. The application for permission to appeal was dismissed.

Wider context: The court observed that control by the English court over its own proceedings and the availability of remedies in the foreign forum (Germany being a signatory to the European Convention) were relevant factors in the balancing exercise.

Appeal (application for permission to appeal) dismissed. The High Court judge lawfully exercised his discretion under rule 6.175(6) and sections 366–367 of the Insolvency Act 1986 by ordering a private examination under conditions that protected the bankrupt's Article 6 interests while enabling the trustee and creditors to obtain information; no error of law or unfairness was demonstrated.

Appeal from the Chancery Division (in bankruptcy) (order of HHJ Kaye QC made 20 May 2008). Permission to appeal was initially refused by Lloyd LJ, renewed before Mummery LJ and adjourned on 12 November 2008 to be heard by the full Court of Appeal, which delivered this judgment ([2009] EWCA Civ 473).